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Foreign investors who want to move to the USA are taking advantage of the Immigrant Investor Program administered by the U.S. Citizenship and Immigration Services (USCIS). Applications are rising rapidly due to favorable changes in the program, and in part due to franchising.
Known as EB-5, the program was created to stimulate the U.S. economy through job creation and capital investment. Here’s how it works:
How the EB5 program works
A qualified foreigner invests $500,000 directly into a business, or into a regional fund that invests in businesses, including franchises of all types. If the investment creates at least 10 full-time jobs for at least two years, the investor gets a green card and eventually U.S. citizenship.
Foreign investors are using EB-5 to move their families to the USA, or to send their children to the USA to study. A married investor gets visas for himself, his spouse, and all unmarried children under the age of 21.
Franchisors favor foreign operators
Foreigners operate many franchised businesses in the USA, and franchisors welcome them because they are enthusiastic about learning a successful operating system that they and their family members can operate. However, EB-5 does not require investors to actually work in a business. As long as they fulfill the requirements of EB-5, the investors can live wherever they choose, start their own business, take a job, or retire in the USA!
As with any bureaucratic program, EB-5 takes time to complete. Investors must prove their money came from a lawful source, and must also pass the scrutiny of U.S. immigration investors. The entire process may require a year before the investor and family can move to the USA.
Direct and in-direct jobs count
Until recently, most EB-5 investors preferred real estate projects, but many of those investments failed to meet the job requirements. Franchising, on the other hand, is a much better choice. An injection of $500,000 invested into certain franchised businesses can create upwards of 40 jobs. Consider, for example, a convenience store franchise. The franchise itself may need only 4 to 6 employees, but indirect jobs also count. A convenience store sells food and beverages and indirectly creates jobs to provide those products. Those indirect jobs count.
Franchisors are unaware of EB-5
“Many franchise networks include multi-unit operators who seek expansion capital, and sometimes partners, to open a dozen or more units, or to expand into a new territory,” explains Dr. John Hayes, who has written about the EB-5 program and helps franchisors and investors understand the opportunities. “However, most franchisors don’t know this program exists, so their multi-unit operators do not know, either. It’s time they discovered the opportunities.” Hayes provides information about EB-5 at www.amazingfranchises.com/EB5/.
Timing is everything, and in the case of EB-5 and franchising, now is the time. The program is up for review in 2015 and it’s anticipated that the investment will be increased to $850,000 or even $1-million.
